TaxTMI 
TaxTMI 
2024 (12) TMI 944
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....f the Revenue reiterates the grounds of appeal and also filed a written submission dated 07.11.2024 wherein he made following submissions: A. The Adjudicating Authority has committed an error in dropping the demand of service tax in respect of the construction services provided by the respondent to Indian Chartered Accountant Institute (ICAI) (Rs. 12,80,544/-). ICAI may have been set up by the Act of Parliament and under the control of the Ministry of the Corporate Affairs, but ICAI does not carry out any functions entrusted to municipality under Article 243 of the Constitution. Therefore, exemption from service tax under Notification No. 25/2012 -ST dated 01.07.2012 is not admissible to the respondent. B. The Adjudicating Authority has erroneously dropped the demand of service tax in respect of services provided to Rajkot Municipal Corporation( Rs. 1,40,96,139/-) for construction of Community Hall and Auditorium. The Adjudicating Authority has not examined the aspect of commercial use of auditorium and hall being collected from public by the Rajkot Municipal Corporation. C. The Adjudicating Authority ought not to have dropped the demand of service tax on services received....
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....t the auditorium is operated on non profit basis and only meant for the welfare of the citizens residing in the territorial limits of the Municipality. G. Construction services provided to GIDC, Vapi: The Adjudicating Authority has wrongly dropped the demand of service tax in respect of construction of College at Navsari under the contract of GIDC, Vapi. The Adjudicating Authority has given the findings that GIDC provides services similar to some of the services covered under Twelfth Schedule under Article 243W of the Constitution like Regulation of land use and construction of buildings, planning for economic and social development, construction and maintenance of roads and bridges etc. Therefore, GIDC is a governmental authority as defined under Notification No. 25/2012-ST dated 20.06.2012. The Adjudicating Authority also held that the construction of Engineering College at Navsari was not for commercial or industrial purpose and therefore, the benefit of exemption from service tax is available to the respondent. He relied on the following decisions: * Shapoorji Paloonji & Com Pvt Ltd. 2016 (42) STR 481 (Pat.) * National Development Board 2019(23) GSTL 151 (AAR-GST) * ....
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....by way of construction, erection, commissioning, installation etc. for a civil structure or any other original works meant for use other than for commerce, industry or any other business profession. The Commissioner has rightly given benefit of such entry to the respondent. However, without prejudice to the exemption notification being present, the definition of commercial or industrial construction service and works contract service itself exempts construction which is undertaken for a use which is non commercial in nature. : Commercial or industrial construction" means- (a) construction of a new building or a civil structure or a part thereof; or (b) construction of pipeline or conduit; or (c) completion and finishing services such as glazing, plastering, painting, floor and wall tiling, wall covering and wall papering, wood and metaljoinery and carpentry, fencing and railing, construction of swimming pools, acoustic applications or fittings and other similar services, in relation to building or civil structure, or (d) repair, alteration, renovation or restoration of, or similar services in relation to, building or civil structure, pipeline or conduit, which is - ....
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....5/2012-ST inasmuch as GIDC fits the definition of governmental authority inasmuch as it is set up by the Gujarat Industrial Development Act and is controlled by the Government of Gujarat. Furthermore, education is also a subject mentioned under Article 243W (12th Schedule) and hence the impugned order does not call for any Interference. Without prejudice to the Commissioner advancing the benefit of Notification No.25/2012-ST to the respondent, it is submitted that construction of educational institute whether for government or even for a private party is considered to be exempt from payment of service tax. It is a settled legal position that educational institutes are not considered as commercial in nature and hence the definition of commercial or industrial construction services or works contract services which have its own exclusion which states that when the construction is undertaken for non commercial purposes, then no service tax is payable under such heads. The Hon'ble Tribunal in the case of M/s NJ DEVANI BUILDERS PVT LTD reported at 2023 (2) TMI 782 & M/s. Harsh Constructions Pvt. Ltd. reported at 2014 (35) STR 617 held that for construction to be levied to servi....
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....owing institutions: (1) Indian Chartered Accountant Institute (ICAI) (2) Rajkot Municipal Corporation (3) GIDC for construction of Engineering College at Navsari 5. In respect of the above institution, whether the same are Government Authority for the purpose of granting Exemption Notification No. 25/2012-ST we refer to the relevant exemption entry No. 12 of Notification 25/2012-ST which reads as under:- "12. Services provided to the Government, a local authority or a repair, governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, maintenance, renovation, or alteration of - (a) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession;" The definition of term 'Governmental Authority' reads as under: "17.3 Further, the definition of the term "governmental authority has sinc been amended, the definition of the teNoification No. 02/2014-ST dated 30-1-2014, and the same reads as under: "(s) "governmental authority" means an authority or a board or any other body: (i) Set up by an Act of Parliament or a State legislatur....
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....rnment, with 90% or more participation by way of equity or control, to carry out any function entrusted to a municipality under article 243W of the Constitution; 15. Having read the two definitions, first and foremost, it is necessary to ascertain the objective behind the Clarification Notification which amended the Exemption Notification and re-defined "governmental authority". A bare perusal of the Exemption Notification reveals that the exemption therein was only extended to those entities, viz. board or authority or body, which fulfilled the three requisite conditions, i.e. : (a) having been established with 90% or more participation by way of equity or control by Government, (b) set up by an Act of the Parliament or a State Legislature, and (c) carrying out any function entrusted to a municipality under Article 243W of the Constitution. It is evident that the scope of the exemption was severely restricted to only a few entities. Although the reason for re-defining "governmental authority" has not been made available by the appellants, we presume that unworkability of the scheme for grant of exemption because of the restricted definition of "governmental authority" was the....
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....nd unambiguous. 20. What is plain and ambiguous from a bare reading of a provision under consideration must be interpreted in the same way as it has been stipulated and not in a way that it presumes deficiency and radically changes the meaning and context of the provision. This is the view expressed in the decision of a five-judge Bench of this Court in Commissioner of Sales Tax, U.P. v. Modi Sugar Mills Ltd. [(1961) 2 SCR 189]. The relevant passage therefrom reads as under : ........ In interpreting a taxing statute, "10. equitable considerations are entirely out of place. Nor can taxing statutes be interpreted on any presumptions or assumptions. The court must look squarely at the words of the statute and interpret them. It must interpret a taxing statute in the light of what is clearly expressed : it cannot imply anything which is not expressed; it cannot import provisions in the statutes so as to supply any assumed deficiency." 21. It is a well-established principle of statutory interpretation that any authority, entrusted with the function of legislating, legislates for a purpose; it can, thus, safely be assumed that it will not indulge in unnecessary or pointless legisl....
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....rkable. We are fortified in our view by the decision of this Court in Sri Jeyaram Educational Trust v. A.G. Syed Mohideen [(2010) 2 SCC 513], where it was held thus : It is now well settled that a provision of "11. a statute should have to be read as it is, in a natural manner, plain and straight, without adding, substituting or omitting any words. While doing so, the words used in the provision should be assigned and ascribed their natural, ordinary or popular meaning. Only when such plain and straight reading, or ascribing the natural and normal meaning to the words on such reading, leads to ambiguity, vagueness, uncertainty, or absurdity which were not obviously intended by the legislature or the lawmaker, a court should open its interpretation toolkit containing the settled rules of construction and interpretation, to arrive at the true meaning of the provision. While using the tools of interpretation, the court should remember that it is not the author of the statute who is empowered to amend, substitute or delete, so as to change the structure and contents. A court as an interpreter cannot alter or amend the law. It can only interpret the provision, to make it meaningful an....
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....distinct from sub-clause (ii). If the author wanted both these parts to be read together, there is no plausible reason as to why it did not use the word "and" and without the punctuation semicolon. While the Clarification Notification introduced an amended version of clause 2(s), the whole canvas was open for the author to define "governmental authority" whichever way it wished; however, "governmental authority" was re-defined with a purpose to make the clause workable in contra-distinction to the earlier definition. Therefore, we cannot overstep and interpret "or" as "and" so as to allow the alternative outlined in clause 2(s) to vanish. 28. Let us consider the problem from a different angle. The revised definition of "governmental authority" and the few punctuations in the definition (two semicolons and two commas) and the conjunction 'or' have been noticed above. Literally read, the conjunction 'or' between sub-clauses (i) and (ii) clearly divides the two clauses in two parts with the first part completely independent of the second part. The first part is by itself complete and capable of operating independently. A construction leading to an anomalous result has to be avoided ....
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....decision of a five-judge Bench of this Court in Dilip Kumar (supra) to urge that in case of any ambiguity in interpreting an exemption notification, the interpretation that favours the revenue must be adopted; also, the burden of proving applicability of the exemption notification would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. At the outset, we record that there is absolutely no quarrel with the proposition laid down therein. We, however, reject the contention of Ms. Bagchi based on Dilip Kumar (supra) because the ratio is not applicable to the facts and circumstances of this case. This, for the simple reason, that there exists no ambiguity insofar as the interpretation of clause 2(s) is concerned. We are endorsed in our opinion by the Latin maxim quoties in verbisnullaestambiguitas, ibinullaexpositio contra verbaexpressafiendaest, which means that when there is no ambiguity in the words, then no exposition contrary to the words is to be made. It is, therefore, clear as a sunny day that there arises only one plausible construction of clause 2(s) which is the one the Patna High Court adopted, and which we....
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.... statute does not yield intended or desired results, that cannot be reason for us to overstep and cross the LakshmanRekha by employing tools of interpretation to interpret a provision keeping in mind its outcome. Interpretative tools should be employed to make a statute workable and not to reach to a particular outcome. Conclusion 34. For the reasons aforesaid, we find no merit in these appeals. The impugned judgments and orders are upheld and the appeals are dismissed, without any order for costs." * NJ Devani Builders Pvt. Ltd. vide Final Order No. 12227/2023 dated 06.10.2023 "The issue involved in the present appeal is that the appellant has provided services of construction of hostel building for IIM, Ahmedabad and for Pandit Deendayal Petroleum University, Gandhinagar. The department in the impugned order is of the view that such service is covered under Works Contract service therefore the claim of Commercial and Industrial Construction Services by the appellant as well as exemption under various sub-headings of the service was untenable. As against this, the learned advocate for the appellant takes us through various judgments to point out that the issue is no longer....
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....r, are liable for payment of service tax. Accordingly SCN, dated 10-9-2012 for demand of service tax of Rs. 5,45,77,175/- was issued by ADG O/O the DGCEI Zonal Unit, Ahmedabad. 17.3 Now I proceed to decide the case on merit. First of all I take up the issue of whether the assessee is sub-contractor of NBCC or [not]. Reliance is placed on letter No. NBCC/AGM/LOA/2009/1208, dated 15-1-2009, written by M/s. NBCC to the assessee, wherein cost of the project, period of construction and other terms and conditions of the agreement were mentioned. The assessee was directed to furnish bank guarantee, insurance coverage and obtaining statutory licenses. The letter written by Sh. A.K. Gupta AGM of NBCC, specifically mentioned that "This letter of award shall form part of the contract agreement. This letter of award is being issued in duplicate. The duplicate copy is to be signed and stamped by the authorized signatory of your company and is to be returned to this office in token of your confirmation and acceptance in full". In this letter the contract was for construction of P.G. Hostel at SVNIT, Surat. The cost of the said project was revised vide letter, dated 12-3-2010. Similar Letter No....
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....za) of the Finance Act 1994 for works contract which reads as "to any person, by any other person in relation to the execution of a works contract, excluding works contract in respect of roads, airports, railways, transport terminals, bridges, tunnels and dams. 17.6 Explanation. - For the purpose of this sub-clause, "works contract" means a contract wherein (I) transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods, and (ii) such contract is for carrying out- (a) Erection, commissioning or installation of plant, machinery, equipment or structures, whether pre-fabricated or otherwise. Installation of electrical and electronic devices, plumbing drain laying or other installations for transport of fluids, Heating, ventilation or air-conditioning including related pipe work, duct work and sheet metal work, thermal insulation, sound insulation, fire proofing or water, proofing, lift and escalator, fire escape staircases or elevators; or (b) Construction of new building or a civil structure or a part thereof, or of a pipeline or conduit, primarily for the purposes of commerce or industry; or - (c) Construction of a new residen....
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....he principles of interpretation. In this context, the reliance placed by the Special Consultant on the decision of the Apex Court in Grasim Industries case is found to be apposite. 10.13 Clause (e) of the definition of works contract--turnkey projects including engineering, procurement and construction or commissioning (EPC) projects--clearly conveys the legislative intent underlying the definition of "works contract" in relation to turnkey projects. It does not exclude EPC projects for irrigation, nor does it discriminate between EPC projects for commercial/industrial purposes and those for non-commercial/non-industrial purposes, nor between EPC projects of Government departments/agencies and private entities. What does not figure in the plain language of the entry cannot be read into it by this Tribunal. 4.1 He contended that the judgment which has been sought to be relied upon is subject matter of SLP before the Supreme Court. 5. However, in our considered opinion, the Tribunal clearly observed as under : 7. Admittedly, in the present case the construction activity of the appellant is with reference to student's hostel and the public hospital. These are non-commercia....